Payables Rising — It's About Time

On Manoj Ranaweera's blog, Will Donovan recently penned a guest post suggesting that EIPP and next generation financial tools in procurement might start appealing to more than just innovative and early adopter types of organizations. According to Will, EIPP "hasn't entirely taken off ... [and] even major players like Ariba and OB10 don't exactly have the market penetration that would reflect the service they offer." But times might be changing. Thanks to the "acquisitions of Xign and Harbor, and as well the startling growth of OB10, Transcepta and Ariba, it is clear that many in the industry are beginning to believe EIPP and other next-generation tools are the next big step in business process improvement." In the coming year, at least in my view, one of the major drivers of EIPP on the payment and discounting side will be the credit crunch that companies are facing. As capital becomes more challenging to access -- especially for small and middle market suppliers who might have fewer lending options than larger organizations -- the potential for early payment without loan-shark factoring very well might outweigh the basis points that a company has to give up in such a situation.